Pricing and reimbursement of off-patent medicines dispensed in community pharmacies.

OBJECTIVE

After expiry of the patent, price competition can lead to savings. However, in Spain, competition in the retail price of prescription off-patent medicines in pharmacies is rare, while large discounts are negotiated in the wholesale market. Some countries have moved from "competition by discount" to "competition by price". This article compares retail prices in Spain with other countries, and the factors that promote price competition.

METHOD

This article reviews the literature comparing prices and the factors influencing competition. A detailed analysis of the design of the market was conducted for Spain and Sweden. Interviews were conducted with experts. The systems were compared for the definition of exchange groups, prescription and substitution, how retail prices and profit margins are regulated, and safeguards to avoid risk of shortages.

RESULTS

Depending on sample and methodology, prices in Spain may be on average 51% to 109% greater than Sweden. Broadly, the literature recommends that the off-patent market should be regulated by competitive forces rather than price caps. Spain and Sweden have many features in common. Key differences are: 1) Sweden allows price differences between medicines, and for prices to rise as well as fall, 2) the tendering process, 3) patient choice, and 4) the architecture of the exchange groups CONCLUSIONS: In Spain, first generic or biosimilar entry provokes a 25-40% discount, but thereafter prices are static. In Sweden, price competition is dynamic. This includes, within limits, freedom to set prices, product differentiation, and patient choice.